April 12, 2019

REVENUE REGULATIONS NO. 05-19

SUBJECT : Implementing the Tax Incentives Provisions of Republic

Act No. 10771, Otherwise Known as the "Philippine
Green Jobs Act of 2016"

TO : All Internal Revenue Officers and Others Concerned

SECTION 1. Scope. — Pursuant to Section 244 of the National

Internal Revenue Code of 1997 (Tax Code), as amended, the following
Regulations are hereby promulgated to implement the tax provisions of R.A.
No. 10771, otherwise known as the "Philippine Green Jobs Act of 2016."
SECTION 2. Definition of Terms . — For purposes of these
Regulations, the following terms are operationally defined as follows:
(a) Business enterprises refer to establishments engaged in the
production, manufacturing, processing, repacking, assembly, or
sale of goods and/or services, including service-oriented
enterprises. They shall include (1) self-employed or own-account
workers; (2) micro, small and medium enterprises (MSMEs); and
(3) community-based enterprises;
(b) Climate change refers to a change in climate that can be
identified by changes in the mean or variability of its properties
and that persists for an extended period typically decades or
longer, whether due to natural variability or as a result of human
activity;
(c) Green building practices refer to the adoption of measures
that promote resource management efficiency and site
sustainability while minimizing the negative impact of buildings
on human health and the environment;
(d) Green economy refers to one which is low-carbon and
resource-efficient, and results in the generation of green jobs and
in improved human well-being and social equity, while
significantly reducing environmental risks and ecological
scarcities;
(e) Green goods and services refer to goods and services that
benefit the environment or conserve natural resources, and may
include research and development, installation and maintenance
services;
(f) Green jobs refer to employment that contributes to preserving
or restoring the quality of the environment, be it in the
agriculture, industry or services sector. Specifically, but not
exclusively, this includes jobs that help to protect ecosystems
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 and biodiversity, reduce energy, materials and water
consumption through high efficiency strategies, decarbonize the
economy, and minimize or altogether avoid generation of all
forms of waste and pollution. Green jobs are decent jobs that are
productive, respect the rights of workers, deliver a fair income,
provide security in the workplace and social protection for
families and promote social dialogue;
(g) Green technologies refer to the development and application
of products, equipment and systems used to conserve the
environment and natural resources;
(h) Sustainable development refers to development that meets
the needs of the present generation without compromising the
ability of future generations to meet their own needs;
(i) Application for tax incentives or tax exemption shall refer
to the application by the qualified business enterprise as certified
by the Secretary of the Climate Change Commission or his duly
authorized representative for additional special deduction in
arriving at the net taxable income.
SECTION 3. Coverage. — Qualified "business enterprises" as defined
in Section 2 (a) of these Regulations duly certified by the Secretary of the
Climate Change Commission or his duly authorized representative.
SECTION 4. Tax Incentives . — A qualified business enterprise shall
be entitled to a special deduction from the taxable income equivalent to fifty
percent (50%) of the total expense for skills training and research
development expenses subject to the following conditions:
(1) That the deduction shall be availed of in the taxable year in
which the expenses have been paid or incurred;
(2) That the taxpayer can substantiate the deduction with sufficient
evidence, such as official receipts, delivery receipts and other
adequate records —
(2.1) The amount of expenses being claimed as deduction;
(2.2) The direct connection or relation of the expenses
incurred for skills training and research development of the
business enterprise;
(3) Such special deductions shall be over and above the allowable
and ordinary and necessary business deductions for said
expenses under the Tax Code of 1997, as amended.
SECTION 5. Procedures for the Availment of Tax Incentives . — In
order to avail of the tax incentives provided for under these Regulations,
qualified business enterprise shall:
(1) Register or update its registration by submitting with the
Revenue District Office, where the qualified business enterprise is
registered, the certification issued by the Climate Change
Commission that the enterprise is qualified to avail the
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 incentives;
(2) Upon filing the income tax returns/annual information returns,
furnish the Revenue District Officer of the place where the said
qualified business enterprise is registered, the following:
a) A sworn list of the total expenses paid or incurred for skills
training and research development during the year;
b) A sworn list of the activities and/or projects undertaken by
the institution and the cost of each undertaking indicating in
particular where and how the expenses were paid or
incurred;
c) A sworn declaration that the expenses paid or incurred for
skills training research development has a direct connection
or relation to the activities and/or projects of the business
enterprise that generate and sustain green jobs.
SECTION 6. Date and Place of Filing Returns. —
(a) Time of Filing. — Claims for special deduction of 50% of the total
expense for skills training and research development expenses by the
qualified business enterprise shall be filed at the time of filing of the income
tax returns.
(b) Place of Filing. — The income tax return and/or the annual
information return of the qualified business enterprise shall be filed in the
Revenue District Office where the qualified business enterprise is registered.
SECTION 7. Repealing Clause . — All revenue rules and regulations,
and other revenue issuances or parts thereof, which are inconsistent with
these Regulations are hereby repealed or modified accordingly.
SECTION 8. Effectivity. — These Regulations shall take effect fifteen
(15) days after publication in the Official Gazette or in a newspaper of
general circulation, whichever comes first.

(SGD.) CARLOS G. DOMINGUEZ III

Secretary of Finance
Recommending Approval:
(SGD.) CAESAR R. DULAY
Commissioner of Internal Revenue

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